Friday, August 15, 2008

Pay to Play and audit firms

I read with interest a story in the Ledger about cosy deals between local governments and the firms that do their annual independent financial audits. It triggered some thoughts about Plainfield's audits:

1. Suplee Clooney have done Plainfields' municipal audits for many years. Are they a pay to play vendor? In order to be a successful government contractor in New Jersey, which they are, the answer is almost assuredly yes. Check the ELEC campaign contribution reports for Assemblyman Green, the state Democratic and Republican parties, etc. They should be there. Don't get me wrong. They seem to do a good job in Plainfield.

2. There are many good audit firms with municipal experience in New Jersey. I think Plainfield should go out to bid. Nothing against Suplee Clooney. Maybe when we've used a different firm for a number of years, we might want to go out to bid again and Suplee Cloney would win. And they are good enough that if pay to play was abolished, they'd do just fine. My guess is they would probably appreciate life without pay to play. But my concern is not just pay to play - see next.

3. Our city financial audit reflects on the entire municipal operation. It reflects on Mayor, Council and staff. But practically speaking the staff handle the fiscal transactions so the audit, to a large degree, is about the staff performance. And when the same audit firm is used for many years, a friendliness, even a cosiness develops between auditor and the staff. For that reason, fiscal oversight experts recommend changing audit firms every so often. I suggested this a few years ago. The response - why change when they do such good work. What do you think, reader?

4. Which brings me to my last thought. I said the audit is mostly on staff performance. It also reflects on the governing body's fiscal oversight performance. We, the City Council, vote to approve the annual audit and corrective action plans for any "findings" by the auditors. We could take it one step further. We councillors could initiate a bidding process for the audit contract and actually select the audit firm. It doesn't quite seem right that the staff recommend the firm that is mostly paid to audit them. This approach is not required by state law but it does pass the test of good fiscal oversight.

So pay to play and familiarity are obstacles to a truly independent audit. The first problem is more complex and ultimately needs a system wide solution. The second could be solved locally any given year.


Anonymous said...

Hi Cory,

Don't feel bad with how long the city has kept the same auditors, the shool district is exactly doing the same, and while their audits, just as the city's, show remediation steps, there is really no one making sure that the remediation steps take place. And while one might think that creating another entity, like we need another one, to make sure remediation steps take place, wouldn't it be much better if people were just to do the right thing for the job they have been hired to do in the first place?

Good luck to you trying to knock some sense out of City Hall. At least you are trying now.

Maria Pellum

Anonymous said...

Pay to play would not be an issue of contention if it were not a key component in government's failure to provide services, deal with quality of life issues and create a positive community image. It is easy to say "throw the rascals out," but I believe the problem is more intractable than that. In short, Plainfield suffers from low self-esteem and a tribal like fear of differences within our ecletic population. On the other hand, is this past election, where two pay to play rascals were enthusiasticly thrown out of office, a sign that Plainfielders have found the collective courage/self-esteem to take back their community from the pay to pay, exploitive and incompetent politicans that have run Plainfield for decades? Should we be optimistic?

Anonymous said...

New people are coming into Plainfield who have high self esteem, and are not willing to be relegated to second class. Maybe those who have been beaten down for so long will join us. In doing so, we can have an intelligent say in what goes on here. In other words, in next year's election - vote for change.

I do have a question about the auditor's, however. Who hires them? Like in a corporation where shareholders have to approve the auditing firm, don't the citizens of Plainfield have to vote and approve on who the auditors are?

Keep up the good work, Cory. You are obviously persona non grata to some, which means you are asking the exact right questions. And, the best news, is that you have your constituents backing. So, not much the old guard can do. Refreshing.

Anonymous said...

Well said Cory,

Many non-profit agencies change their auditing firms every few years and all of them should.

Familiarity can breed more than just coziness, it also breeds contempt for doing the 'right' thing.

I'd like to go on record as backing a council position to ask for bids to audit city hall.

Brenda Anderson

Anonymous said...

Very funny. The problem here is that as soon as Jerry/Sharon change the auditors, the very people like you will shout out aloud that Jerry is putting in his cronies.